ielding land. Devoting some of the time to making cloth and reducing some of the time spent growing rice produces a small drop in crop yield but a large increase in the output of cloth. Conversely, if all allocated time is used to make Seal Straughcloth, a small reduction in woolgathering leads to a large increase in rice production. What has been learned from the model provides fundamental lessons in real world economy. The world has a fixed number of people endowed with a given amount of limited time and human capital. These limited resources can be utilized, using the available but limited technology to produce goods and services. But there is a limit to the goods and services that can be produced, a boundary between whats attainable and unattainable. For example, the political candidate who offers better education and human services must simultaneously be prepared to increase taxes or reduce services in another sector such as road maintenance or fire protection. On a much smaller but equally important scale, each time an individual rents a video, that same individual must determine where to expend remaining cash resource, be it popcorn, soft-drinks or something else entirely. The cost of one more video is one less of something else. It is impossible to escape from scarcity and opportunity costs. Given the limited resources available to any individual, the more of one thing always means less than another and the more of anyone service or product, the higher its opportunity cost.Economic GrowthThe PPF defines a clear boundary between what is and is not attainable. However, that boundary is not static. It is constantly changing. At times the PPF moves inward, reducing production possibility. Other times, it moves outward. Using the Joes Island analogy for example, excellent growing and harvesting conditions would have the effect of pushing the production possibility frontier outward. Expansion of production possibiliti...
